ISSB Guide 3

Question 1

What are the four core disclosure pillars that IFRS S2 shares with the TCFD framework?

Accepted Answer

Governance, Strategy, Risk Management, and Metrics & Targets

Answer

IFRS S2 is structured around the same four pillars as the TCFD recommendations: Governance, Strategy, Risk Management, and Metrics & Targets.

Question 2

Which warming scenario does IFRS S2 guidance specifically reference for climate scenario analysis?

Accepted Answer

1.5°C scenario consistent with Paris Agreement ambitions

Answer

IFRS S2 explicitly references a 1.5°C global warming scenario as one entities should consider when conducting climate scenario analysis.

Question 3

Under IFRS S2, how are Scope 3 greenhouse gas emissions defined?

Accepted Answer

All other indirect emissions occurring across the value chain

Answer

Scope 3 covers all indirect GHG emissions not included in Scope 1 or 2, arising from upstream and downstream activities in the entity's full value chain.

Question 4

Which of the following is classified as a 'physical risk' under IFRS S2?

Accepted Answer

Acute and chronic climate hazards such as floods and rising temperatures

Answer

Physical risks include acute events (e.g., extreme weather) and chronic shifts (e.g., sea-level rise and temperature increases) that can affect an entity's assets and operations.

Question 5

According to IFRS S2 guidance, what is a 'climate-related opportunity'?

Accepted Answer

A potential positive effect arising from climate change or the response to it

Answer

Climate-related opportunities are potential positive outcomes — such as new markets, resource efficiency, or new products — arising from climate change or the shift to a lower-carbon economy.

ISSB - International Sustainability Standards Board Practice Test

ISSB - International Sustainability Standards Board Practice Test

ISSB Guide 3